Gold Lower Awaiting ECB Decision

Gold futures moved lower Wednesday in step with a weaker euro a day ahead of what’s expected to be additional monetary stimulus courtesy of the European Central Bank.

Gold futures for April delivery were down $8.70, or 0.7%, at $1,254.70 an ounce after testing $1,279 during Tuesday’s U.S. trading session. Gold touched $1,279.60 last week, the highest since Feb. 3, 2015. May silver is off 7 cents, or 0.5%, to $15.30 an ounce.

U.S. stock futures were flashing a higher open on this bull market’s birthday, boosted in part by a recovery in oil prices. U.S.-traded crude is near $36.94 a barrel. London-traded Brent pushed back above $40 a barrel.

Economists and investors are broadly looking for the ECB on Thursday to cut its deposit rate by at least 10 basis points and expand its asset-buying program in an effort to pump life into persistently below-target growth and inflation. Any decision that defies expectations could stir metals trading volatility. Markets also expected more aggressiveness from the ECB in December and were left disappointed. In response then, the euro reversed losses against the dollar, lifting gold.

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Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.

MarketPulse is a forex, commodities, and global indices analysis, and forex news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

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